What happens when the art world and crypto collide?

Nobody’s quite sure yet, but they’d very much like to find out.

Those at all familiar with the cryptocurrency community know the term “hodl,” a typo born out of a bitcointalk.org member’s drunken urgency to “hodl” (he meant “hold”) onto his Bitcoin even while its worth in USD plummeted in 2013. “Hodl” has since grown pervasive in the cryptocurrency community, generating various memes and signifying the “don’t ever sell no matter what” ideology for the most dedicated crypto holders.

The term’s ubiquity in the crypto space is similar to Robert Indiana’s LOVE sculpture in the art world. Displayed in multiple public locations in the US (including Scottsdale, Philadelphia, New York, and Grand Rapids), on 300 million postage stamps, and at least two private homes (as I’ve witnessed during my time as an art conservator), LOVE permeates the masses’ knowledge of fine art. Meanwhile, a Twitter search for #HODL will leave you scrolling eternally through crypto-enthusiasts’ posts, and its popularity on Google Trends tracks almost perfectly with Bitcoin’s 2017 rise — and 2018 fall — in price.

Cryptograffiti

Bring those two icons together and you get HODL, a serigraph printed on a Federal Reserve bag in homage to Indiana’s original work. The artist behind HODL is the San Francisco-based Cryptograffiti, who asked that I refer to him by his artist pseudonym. Cryptograffiti started including QR codes in his street art around 2011 so appreciative passersby could donate, or send “micropayments,” to help fund his work.

Micropayments is one of the ways Cryptograffiti believes blockchain technology — distributed, decentralized ledgers that most know for making cryptocurrencies like Bitcoin possible — could benefit artists. Multiple viewers of an artist’s work could donate small amounts of cryptocurrency through transparent, traceable blockchain networks — a reasonable ask for people who enjoy a work but don’t have the money to buy it in full and want to ensure their donations are going straight to the artist. This type of crowdfunding would democratize the art market, which has thus far only been open to collectors who have the means and connections to purchase work.

“For me, it’s a goal to make [blockchain] technology catch on and become commonplace,” Cryptograffiti told me over the phone from the Ethereal Summit, a blockchain conference that took place in Brooklyn last month. HODL would soon go up for sale at the summit’s Codex Charity Art Auction led by Codex Protocol, a decentralized registry for valuable assets that seeks to solve art world problems like tracking provenance (“the identity and chain of ownership,” which can be difficult to track when pieces change hands over time, creating the potential for forgeries to be passed off as the real thing — for a sense of how commonplace this is, consider the fact that the President owns a fake Renoir). Proceeds from the auction would go to the Foundation for Arts & Blockchain, which aims to support artists working with blockchain technology.

“A lot of people in the art world have been trying to get their heads around blockchain and art for some time,” said Jess Houlgrave, COO at Codex, who studied the topics jointly while attending Sotheby’s Institute of Art. The auction would give those people the opportunity to see the nascent pair in action, at the same time the traditional art world’s auction season takes place in New York.

“From 26 broad conversations about art and blockchain, the most common situation was a mixture of hope and fear in equal balance,” wrote three Oxford University professors in a report titled The Art Market 2.0: Blockchain and Financialisation in Visual Arts. The “hope” lies in the eradication of the “starving artist.” The “fear” is that a blockchain network will become so crucial to the art market that it will eventually cannibalize it, eating up large portions of artists’ revenue and essentially taking ownership of the industry. (The report also compared blockchain technology’s current state to “the internet…in 1993,” so no one in the art world need fear any sort of art market blockchain monopoly yet.)

Artists have been engaging with blockchain technology, and blockchain enthusiasts with artists, since Bitcoin started entering public awareness in the early 2010s. Artists viewed the emerging phenomenon as an opportunity to explore the idea of value, perhaps best exemplified by Sarah Meyohas’s 2015 work Bitchcoin. Bitchcoin was a blockchain-based coin “backed” by portions of photographs Meyohas took as part of a project called Speculation from the same year. Bitchcoin holders, then, could trade in their coin for pieces of Meyohas’s physical artwork.

Around 2013, Bitcoin wallet companies, creators of digital safeguards where individuals could store their personal Bitcoin, started approaching conceptual artist and photographer Kevin Abosch. He’d come up with a conceptual art project called KwikDesk which allowed for anonymous communication thanks to what he called “some very sophisticated backend security.” That security, hoped wallet startups, could help protect users’ Bitcoin.

Abosh didn’t go to work for any wallet companies, but he does continue to use blockchain technology as a “tool” in his work and has become an authority on the merging worlds, speaking at blockchain conferences in South Korea, Russia, and the U.S.

“A day does not go by, not one day in the past couple months, that somebody around the world doesn’t ask me to either weigh in or participate in a discussion about how blockchain may affect the art market,” he told me when I met with him at his pristine Manhattan apartment/studio near Central Park last month. “Intimate portraits of killing machines” stared at me from the white walls in a room adjacent to his kitchen, a floor below the studio space I couldn’t enter because it housed at least two “secrets.” Abosch sat in front of a map depicting how he’d “tokenized” the city’s streets as he compared an art piece’s “market value” to “alchemy” (“over time it’s imbued with qualities that cause people to agree that it has some type of value”). He added, “I really don’t care about the art market. I care about blockchain insofar as I can leverage it as a method to make art.”

“Stealing the Contents of this Wallet Is a Crime”
Kevin Abosch

Abosch donated a piece called Stealing The Contents of This Wallet Is A Crime (see above) to Codex’s auction. Part of Abosch’s I AM A COIN project, in which he created 10 million IAMA coins (ERC-20 tokens on the Ethereum blockchain) and used his own blood to stamp out their contract addresses, Stealing The Contents of This Wallet Is A Crime refers to the wallet address and key where he stored 100 IAMA Coins, and which he made public as part of his work before they were ultimately stolen.

Not all the work set to sell at the May 12 auction had such a direct tie to blockchain technology, however. Unlike Abosch, Terry Cook, a UK-based artist, didn’t have to do any coding to create his blockchain-related work. Rather, he paints pictures of the symbols of cryptocurrencies that rely on blockchain technology, like Bitcoin, Dash, Litecoin, Monero, and Ethereum, which he offers for “free” on his website (he takes donations in the form of all five cryptocurrencies). “I posted some work on Reddit when I first started painting Crypto-art and was overwhelmed with requests,” Cook told me via email. “I think it’s only natural that art and blockchain technology intersect as their mutual fans have similar degrees of passion.”

Multimedia artist Matthew Tierney was one of two artist participants whose work didn’t involve blockchain technology at all (the other was Yiying Lu, creator of what’s now well known as the Twitter Fail Whale). In the work he offered to the auction, Dancer (H) (2017), Tierney started with a charcoal line drawing that he painted on then photographed. He then drew atop the resulting image on an iPad, then an iPhone, “degrading the image through digital transfer, reprinting, painting, drawing, photographing” and so on to create the final work. His process, though not blockchain-based, still makes viewers take stock of value when considering physical vs. digital art, an “original” work vs. a copy.

“Dancer”
Matthew Tierney

Covered by Wired, VICE News, and The New York Times, Codex’s May 12 auction kicked of with the sale of a CryptoPunk for $950 USD and ended with the sale of a CryptoKitty for $140,000 USD. This order was deliberate. Unlike the other eight lots sold during the auction, CryptoPunks and CryptoKitties originated as rare, digital collectibles that targeted people interested in blockchain technology. Started in June 2017 by Larva Labs, there are only 10,000 total CryptoPunks, which are 24-by-24-pixel graphics in the shape of humans, apes, zombies, and aliens. Alternatively, CryptoKitties, launched November 2017 by Axiom Zen, became popular enough to have overwhelmed the Ethereum network in December, can breed to create new Kitties. Some are more valuable than their “parents” due to particular recessive traits. The audience, attendees at a blockchain conference, likely showed up aware of both and understood their “value.”

A cryptokitty being auctioned
Courtesy of Codex

As for the “traditional” art crowd, they “maybe have yet to see cryptocollectibles as actually becoming part of the art world,” said Houlgrave.

Cryptograffiti’s HODL, the second lot to be auctioned, started with an online bid for $2,600. It ultimately sold for $8,000 to Mike Novogratz, a former Wall Street “legend” turned crypto whale. Prices appeared on a screen behind the auctioneer’s podium in USD, Bitcoin, and Ether, but onlookers couldn’t tell which currencies people were bidding in (prices were all announced in USD). Lot four, Tierney’s Dancer (H), sold for $5,500. “I’m very happy that it sold at all,” he said. “Ninety-nine percent of the people there had never heard of me or saw my art personally.”

“I mean it was fucking crazy to be honest in terms of how much money [the auction] raised,” he continued (a total of $192,350 for the charity). “I think it’s one of those moments in the art world where a lot of people would scratch their heads, or still are.” Now, Tierney is “open” to the “possibility of accepting crypto as payment.”

Next, Cook’s Ethereum went for $2,800. Online bidders fought back and forth with those in the room for Abosch’s piece, one finally buying at $8,500. “Fail Whale” sold for $12,000.

Outside of the Codex Charity Art Auction, the art world and the crypto world have been tentatively mingling. Auction houses have been interested in accepting bids from the “newly crypto wealthy,” Philip Michaelson, president of LiveAuctioneers, the digital bidding platform that partnered with Codex for the event, told me on the phone. These auction houses, Michaelson explained, “tend to sell more modern art...or jewelry and cars,” inventory that’s more likely to appeal to this class of buyers and includes big names they’ll recognize, like “Rolex or Warhol.”

Meanwhile, Bryant Toth, owner of New York’s Toth Gallery and Tierney’s art dealer, noticed “five or six” galleries proudly advertising crypto sales at an art event he attended in Miami last year. Toth is “open” to accepting blockchain-based currency down the line. “You don’t need to pigeonhole yourself and focus solely on this older generation of blue chip collectors,” Toth said. “Cultivating a much younger collector base, I hope, is a better model.”

“Ethereum”
Terry Cook

More “newly crypto wealthy” may be entering the art market, but most wealthy, young art collectors aren’t necessarily thinking about crypto. However, of the twelve “young art collectors to watch” on a 2016 Artnet list, I recognized one, Chinese art museum founder Michael Xufu Huang, from his appearance at the blockchain-centric Rare Digital Art Festival I attended in January. There, he spoke on a panel about how blockchain could “change the game for artists” and voiced interest in its ability to “democratize the space for collectors.”

Rare Art Labs hosted that festival. The organization aims to let artists sell work on their own terms directly to buyers. DADA — whose founder Beatriz Ramos was also at the festival — has a similar aim. Its white paper describes this as “democratiz[ing] the creative process by encouraging anyone to freely participate” in the collaborative “visual conversations” created on the platform, where provenance for each piece is tracked by blockchain technology.

A slew of other companies also want to bring art and blockchain together, including Maecenas, a Singapore-based, self-described “open blockchain platform that democratizes” — there’s that word again — “access to fine art.” It has its own token called, appropriately, ART. Just this morning, I got an email asking me to provide feedback on a beta version of a project called CryptoCanvas. Offering users the ability to create, trade, and collect art, it appears similar to DADA.

A cryptopunk being auctioned
Courtesy of Codex

These instances don’t mean that art and blockchain technology are deeply intertwined. These are the startups, art/blockchain hopefuls, and artists whose work has already been purchased using Ether. It’s not like art collectors snuck into the Ethereal Summit auction to nab a CryptoKitty, or even an Abosch (who’s previously sold photographs for up to $1 million and captured striking portraits of Malala Yousafzai and Yoko Ono).

“I know Christie’s as a company is certainly watching the technology,” said Caroline Ervin cautiously, a jewelry specialist at Christie’s who volunteered as the auctioneer at Codex’s event. Christie’s is by no means bullish on blockchain, at least not publicly. (Both Christie’s and Sotheby’s, another major auction house, declined my requests for comment. Ervin’s views are her own and do not represent those of the auction house.)

Plus, there is “resistance” in the art world to blockchain technology, Cryptograffiti noted. “It has the potential to take money out of the hands of some dealers,” he said, describing the lack of transparency that often exists between artists and dealers. “I’ve heard stories about artists that have dealers overseas and they just randomly will get a check sent to them and will have to trust that was exactly the amount the work was sold for.” The transparency blockchain technology promises to bring to the art world would limit the opportunity for these shady deals.

In terms of value, art and cryptocurrencies share key characteristics. They’re ever-changing and easily influenced by things like scarcity and key players’ actions. (Fran Lebowitz sold her Warhols “two weeks before he died for virtually zero;” if she’d held onto them, she’d have been able to net millions, while Litecoin founder Charlie Lee sold and donated all of his Litecoin in December 2017 because he had “so much influence” over its worth.)

As a voice on the confluence of art and blockchain technology, Abosch has engaged in numerous conversations about the meaning of value. He sometimes brings up one his blockchain-based works, the Forever Rose, in these discussions.

The image that inspired Abosch’s Forever Rose

Though inspired by a photograph of a physical rose, the art piece itself is a token on blockchain technology — sort of like a modern day version of surrealist René Magritte’s The Treachery of Images (1929). “You can’t see it, you can’t feel it,” Abosch said. So people will ask him, If you can’t hang Forever Rose up on the wall and you can’t see it, how can it possibly have any value?

“Instead of answering that, I turn it around and ask another question,” said Abosch. “I go, well, you value love, don’t you? You can’t hang that on a wall.”

“And what do they say to that?” I asked Abosch.

“Ahhhh,” he said, mimicking the sound of deep thought.

But you can hang LOVE on the wall. The recently deceased Indiana’s print goes for a few thousand at Sotheby’s.

However, ownership of the piece’s copyright remains in dispute. Just a day before Indiana died, an offshore company called the Morgan Art Foundation, whose operators wish to remain unknown, sued the artist over the rights to the famous work. Had the proper blockchain technology been in place, we still wouldn’t be able to answer the deep questions about value and worth posed by artists such as Abosch, but at least we’d know who owns the rights to LOVE.